Impact of increase in Fuel

Saturday, 26 June 2010

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“Fuel prices go up does not matter, which clearly prices of basic goods such as rice, cooking oil, fish, and so do not go up”. Said a housewife in the ranks of the queue to buy kerosene at a national television station (quiz, May 19, 2008). It is this which is the greatest fear of our people ketka fuel (fuel oil) price increases, which is skyrocketing price of other staple goods.

As fuel prices rise, the more kemiskinanpun. This occurs because rising prices joined other basic goods. This is similar to the theory ever presented by Guy Standing that poverty can arise from (a) the risks akbat economic shocks such as rising prices, disease, keelakaan, natural disasters, (b) the ability of citizens or groups of citizens are limited to recovering themselves after economic disruption (Reuters, 5 April 2008).

Incident in 2005, could be a very valuable lesson. Where at that time, the government decided to raise fuel prices a few percent. After the price increase, the price of other staple goods also go up, as well as luxury goods group. After the market turmoil that way, the government issued a policy BLT (direct cash assistance) to assist the poor who increasingly impoverished due to the rising prices of these items. However, this is just the nature of such assistance is healing (Reuters, 5 April 2008), is not an ideal way out.

In 2008 the government decided to raise fuel prices again. The reason is to rescue the 2008 Budget. The question that arises now is whether the government wants to save the people or the state budget alone? Again and again to cover up weaknesses inability to seek a better solution. The government finally issued another BLT policy.Once again, it is merely a policy as a mere healing and temporary.

The most effective action is done today is not to raise fuel prices. Rationalization is its effect on the level of the market. It is better to rescue the people rather than save the state budget is still prone to irregularities and wastage. Aside from the ways mentioned above, more effective action to panjan term and the effect will be felt in the future is to downsize the cabinet (Kwik Kian Gie), a diversified energy, micro-economic empowerment and nationalization BUMN.